A global shipping giant is being forced to recall its fleet and sell the ships because it's close to going broke

Giant
cranes are seen at the Hanjin Shipping container terminal at
Incheon New Port in Incheon, South Korea, September 7,
2016.Reuters

Hanjin Shipping, Korea’s largest and one of the world’s top ten
container carriers, has been ordered to cut its fleet immediately
in a court ruling.

The Wall Street Journal is reporting that a South
Korean bankruptcy court ordered the company to return the ships
it charters back to their owners and to sell as many of its own
ships as possible.

In response to the immediate order, ships have been unloading
goods at ports in California, Spain, and other parts of the
world.

According to Fortune, the company had a fleet of 141
vessels as of early September. And out of the 97 container ships
in the fleet, 60 were chartered and 37 owned by Hanjin.

This is the strongest indication that the Korean business will be
liquidated or reduced.

This month Hanjin Shipping filed for bankruptcy protection,
leaving a portion of its fleet stranded as the company is unable
to pay unloading fees.

It has previously received a $US90 million bailout from its
parent company. Business Insider’s Bob Bryan has more on that
here.

Analyst Mark Levinson told the ABC this month that the Hanjin crisis
underscores the soft outlook for global trade and over capacity
in the container shipping market.

“On the one hand, many of the ship lines have built enormous,
enormous ships – these ships can carry as many as 10,000 40-foot
containers at one time – and so there’s a lot of capacity
floating around the world,” he said.

This view has been reflected by many others who see reduced
shipping levels is slowdown in global trade.

“It is worse than in 2008. The oil price is as low as its lowest
point in 2008-09 and has stayed there for a long time and doesn’t
look like going up soon. Freight rates are lower. The external
conditions are much worse”.